A company is established with every intention of having growth and success. However, not all companies grow to be a success. Some companies do not witness the desired growth, some do not see a sustainable growth while some fail entirely. And it might not be because of the lack of hard work or motivation of the entrepreneur. That said, there is something lacking or overlooked that leads to the failure of companies.
Let us try to understand why companies fail at growth and learn how it can be avoided:
Lack of planning
No company can grow without a proper and structured plan.
- What type of market it is trying to cater to?
- Does its product have a unique value proposition?
- Who are its competitors?
- How can the funds be rightly allocated?
- Is there an annual growth plan?
It is important to answer these questions, chart out a growth plan and stick to it.
Failure to change and adapt
An entrepreneur should understand that the market does not stand still. As the market evolves, the consumers’ needs and preferences change too. If you stick to continuing what you did previously, it can prove to be a death trap.
A company needs to change according to changing market preferences in order to survive and grow.
Poor employee retention
Employees are not workers, they are the human capital. The reason the company exists in the first place. No company can grow and achieve success without the right people. The faster a company learns this, the better it is for its growth.
A high employee turnover can pull down the company’s growth plans. The costs involved to hire and train an employee, and then to appoint a new employee and train him/her to bring them up to speed with the current level of productivity, are huge.
The first step of employee retention is the hiring process. Be very particular about your hiring protocol – applicant credentials, background checks and a stringent interview process. Once you have hired the employees, allocate the work wisely, train them and invest in their learning and development. Remember, the relationship is mutual. When a company takes interest in the personal growth of the employees, the employees start taking interest in the company’s growth.
Focus on product instead of service
The product is important, but not at the cost of the customer service. Whenever companies give more importance to their products over their customers, they are doomed. Products bring in the money, but only when the customers are willing to pay for them.
Be it internal or external customers, your mantra should be ‘Customer first’. Listen to your customers, take heed of their ideas/suggestions, and try to apply them.
Fear of experimenting
Most companies stick to their age-old formula that has served them well over the past years. This stops them from innovating. Either they are afraid of trying or have become complacent. What they fail to realise is that what has worked for them in the past, might not work in the future.
They should experiment. These experiments help them learn about their product and the market. Hence, it is important that they keep on experimenting and looking for newer way to boost their growth.
Improper allocation of resources
When you as an entrepreneur think you are the centre of everything and can run things by yourself; it’s a classic recipe for disaster. You can’t make all the decisions and do all the work yourself, and still expect everything to turn out right all the time. It just doesn’t happen that way - at least not in the business world.
You can’t grow unless you learn to delegate and delegate wisely. So, resist the urge to do ‘it all alone’ and hire decision makers and helpers who can take the burden off your shoulders. Once you have built your A+ team, make sure those people have the autonomy and authority to implement experiments and make decisions.
Ignore the mistakes
One of the biggest mistake companies make is failing to learn from mistakes, whether theirs or others’. But what can prove detrimental to the growth of your company is ignoring those mistakes and sweeping them under the carpet. If you ignore them, the chances are you may repeat them.
Bring the mistakes out on the table, dissect them without blame and learn from them. Once the error has been acknowledged and dealt with, move on.
Falter at leadership
A weak leadership ridden with stubbornness, ego and lack of vision can spell doom for even the most successful companies. If the leaders of a company are more interested in establishing their superiority, fail to grab opportunities, lack the commitment and the drive to make it big, not much can save the company from failing.
The people at the helm need to be courageous, positive, passionate, humble and ethical.
The list may seem daunting, but the good news is, even if you achieve one of them at a time, you will certainly see a difference in your growth. However, for long term, sustainable growth, all the above must be achieved and addressed on a regular basis.